United States President Donald Trump has threatened Brazil with a 50 percent tariff, citing the felony expenses in opposition to its former president and his political ally Jair Bolsonaro, who’s accused of plotting a coup.
In a letter to Luiz Inacio Lula da Silva, Brazil’s present president, Trump stated on Wednesday that the remedy of Bolsonaro, who refused to publicly concede the presidential election that he misplaced to Lula in 2022, “is a global shame”.
The letter was considered one of 22 tariff notices Trump despatched this week to varied international locations. On Monday, the president extended a pause on his sweeping world tariffs from Wednesday to August 1.
For essentially the most half, Trump says he’s attempting to rebalance massive buying and selling deficits, whereby the US imports extra from a rustic than it exports there.
However the US has a commerce surplus with Brazil, and the tariff threatened in opposition to South America’s largest economic system was increased than these obtained by different international locations, which have principally fallen within the vary of 25 to 40 %.
The escalation in tensions between the US and Brazil got here as Lula hosted representatives from China, Russia, Iran and different nations for a BRICS summit of rising economies in Rio de Janeiro this week.
Leaders attending the summit criticised Trump’s tariffs and the latest US and Israeli bombing of Iran, drawing threats from Trump of a ten % further tariff for “anti-American” BRICS-aligned international locations.
What has Trump introduced in relation to Brazil?
Trump has continued to publish letters informing US buying and selling companions of tariffs deliberate to start on August 1 if they will’t attain commerce offers along with his authorities earlier than that. Up to now, he has despatched 22 letters to heads of state. Extra might nonetheless come.
Whereas the letters have principally denounced commerce between these international locations and the US as “removed from reciprocal”, Trump’s letter to Lula was stronger.
He wrote that “due partially to Brazil’s insidious assaults on Free Elections, and the basic Free Speech Rights of People”, he deliberate to levy a 50 % tax on Brazilian items exported to the US.
“Please perceive that the 50 % quantity is way lower than what is required to have the Stage Taking part in Subject we will need to have along with your Nation,” Trump added. “And it’s essential to have this to rectify the grave injustices of the present regime.”
He stated: “The way in which that Brazil has handled former President Bolsonaro, a Extremely Revered Chief all through the World throughout his time period, together with by the US, is a global shame.”
How has Brazil responded?
Lula promised to hit again with tariffs of his personal if Trump follows via along with his menace.
“Brazil is a sovereign nation with impartial establishments and won’t settle for any type of tutelage,” Lula stated in a put up on X.
He added that the felony case in opposition to Bolsonaro, who challenged the outcome of Brazil’s 2022 election, is a matter solely for the justice system and “not topic to interference or menace”.
Why is Trump focusing on Brazil when the US has a commerce surplus?
In accordance with the Workplace of the US Commerce Consultant, the US imported $42.3bn of products from Brazil in 2024 and exported $49.7bn.
Briefly, Brazil’s purchases from the US amounted to roughly $7.4bn greater than US purchases from Brazil.
Ever for the reason that announcement of his “Liberation Day” tariffs, on April 2, Trump has constantly acknowledged his want to scale back America’s commerce deficits with its buying and selling companions.
In Trump’s view, deficit international locations, such because the US, import items that might have been produced at house, harming home employment and financial progress within the course of.
Nevertheless, “Brazil has traditionally run a small commerce deficit with the US”, stated Elizabeth Johnson, an financial analyst at TS Lombard, a method and political analysis agency. “It is extremely a lot political. … It’s a part of the Bolsonaro household’s effort to get Trump to weigh in on the continued trial of Jair Bolsonaro.”
Certainly, this isn’t the primary time Trump has used the specter of tariffs to attempt to alter different international locations’ home coverage choices.
Since returning to workplace in January, he has threatened a 25 % tariff on Colombian items and stated he would double that if the nation refused to simply accept deportees from the US. Colombia in the end accepted his phrases.
What commerce does the US do with Brazil?
In 2023, the steadiness of commerce (imports plus exports) between the US and Brazil amounted to $104bn, making Brazil the US’s fifteenth largest buying and selling companion.
Prime US exports to Brazil final yr included plane and spacecraft (amounting to about $7bn), fossil fuels ($9bn) and industrial equipment comparable to nuclear reactors and electrical tools (roughly $10bn), in accordance with US Census Bureau knowledge.
Brazil’s exports to the US in 2023 have been led by crude oil and fossil fuels (about $8.8bn), iron and metal merchandise ($5bn) and soya beans ($3.3bn).
What impression might a 50 % tariff have on Brazil’s economic system?
It might severely harm corporations extremely uncovered to the US market. Particularly, corporations within the base metals and agricultural sectors may very well be badly hit.
In accordance with Johnson, Trump’s tariff menace may very well be a drag on financial progress as a result of the US is Brazil’s second largest export market after China.
Certainly, Goldman Sachs has calculated that Brazil’s exports to the US signify 2 % of its gross home product and Trump’s tariffs might minimize its financial progress by 0.3 to 0.4 proportion factors.
What impression might this have on the US economic system?
If the tariffs are applied, US corporations that purchase Brazilian items would almost definitely have to search out different sources for these merchandise, and this might take time.
Within the meantime, “the semifinished metal merchandise from Brazil utilized in American manufacturing imply [that higher tariffs would be] a detrimental,” Johnson informed Al Jazeera.
As well as, “beef, orange juice, espresso” and different farm merchandise travelling from Brazil into the US would turn into way more costly, she stated.
However, Johnson urged, “There’s room for Trump to attain a win with Brazil by permitting extra ethanol exports into the US, which might assist [American] farmers.”
What expenses is Bolsonaro dealing with in Brazil?
Bolsonaro, who was president of Brazil from 2019 to 2023, refused to concede his presidential election loss to his left-wing rival in 2022.
Bolsonaro raised questions concerning the accuracy of the election consequence, claiming that some digital voting machines had been defective.
Shortly after Lula took workplace in January 2023, thousands of Bolsonaro’s supporters angered over the election consequence stormed the presidential palace, Congress and the Supreme Courtroom within the capital, Brasilia.
Now, Bolsonaro is dealing with felony expenses for allegedly plotting a coup and for alleged actions he took to overturn the 2022 election consequence.
Bolsonaro and 33 different individuals have been charged this yr, and the ex-president’s case is being heard by the Supreme Courtroom. He might face 40 years in jail if discovered responsible.
Bolsonaro has denied any wrongdoing and has framed the trial as a politically motivated assault.
Trump, who additionally falsely claimed he had crushed Joe Biden within the 2020 presidential election, had confronted criminal charges associated to looking for to overturn that election. His supporters additionally stormed the US Capitol earlier than Biden took workplace, looking for to cease the certification of the election outcomes.
Trump has highlighted what he regards as parallels between himself and Bolsonaro. On Monday, he wrote on social media that he empathised with what was taking place to Bolsonaro: “It occurred to me, instances 10.”
Which different international locations have been notified of latest tariffs?
Aside from Brazil, recipients of tariff letters on Wednesday included the Philippines, Moldova, Sri Lanka, Brunei, Libya, Algeria and Iraq. They have been notified of tariffs as excessive as 30 %.
The charges Trump stated could be imposed on Sri Lanka, Moldova, Iraq and Libya have been decrease than these he initially introduced in early April.
Tariffs on items from the Philippines and Brunei have been increased. The speed for items from Algeria remained the identical.
Trump has stated corporations that transfer manufacturing to the US will likely be exempt from tariffs. However he additionally warned that if international locations retaliate, they may face even increased US duties.
The US and its largest buying and selling companions have been negotiating commerce offers since Trump introduced the tariffs. However up to now, solely Vietnam and the United Kingdom have reached new offers whereas a partial agreement has been reached with China.
Extra not too long ago, Trump administration officers have indicated that offers with India and the European Union could also be imminent.
